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Financial stocks are experiencing some volatility right now due to the prospect of new reforms in the industry, and penny stocks in this sector are even more aggressive right now. Of course, it’s worth noting that this “jumpy” movement in financial penny stocks is only a bad thing if you’re caught on the wrong side of the move. A penny stock that jumps 10% upwards in one day is showing some volatility you can be pleased with!

Of course, penny stocks in any sector carry bigger risk because of this price movement. And frankly, the financial sector is much more aggressive than other industries in the wake of the financial crisis and more recently the prospect of a financial reform bill and the recent Goldman Sachs (GS) fraud allegations. But again, this greater risk allows for greater reward if you play your cards right.

As a growth guy, I normally steer clear of many financial stocks simply because they don’t offer up the fundamentals necessary to pass my exhaustive stock screening system. I demand significant sales and earnings growth, and banks rarely show this type of performance quarter to quarter.

Except, this is, banks that trade as penny stocks. These up-and-comers can see explosive growth since they have a much higher ceiling, as opposed to a Goldman Sachs or a Bank of America (BAC) that can’t significantly increase its reach since operations are already so massive.

Last week, I offered up a list of 12 bank stocks to buy and 12 financial investments to sell. I want to follow up this week with you and offer 5 additional penny stocks in the financial sector that are investments worth your money right now. I don’t use the term penny stocks literally of course, just for any stock that’s cheap – in this case, less than $2.

Let’s take a look as some of my favorite penny stocks in the financial sector:

Penny Stock to Buy – Ladenburg Thalmann (LTS)

Sub-Sector: Capital Markets

Market Cap: $240 million

52-week range: $0.45 – $1.65

Portfolio Grader Stock Grade: B – Buy

Ladenburg Thalmann Financial Services Inc. (LTS) provides investment banking and research services in the U.S. Though the company has not turned a profit in a few quarters, it keeps narrowing its loss and is showing good momentum. The stock also has seen significant buying pressure, hitting a new 52-week high at the end of April before the market’s antics in May pushed shares of this penny stock down a bit.

Penny Stock to Buy – Hanmi Financial (HAFC)

Sub-Sector: Commercial Banks

Market Cap: $90 million

52-week range: $1.02 – $4.26

Portfolio Grader Stock Grade: B – Buy

Hanmi Financial Corp. (HAFC) provides general business banking products and services in the United States, primarily in Southern California. Like Ladenburg, HAFC stock has seen a few quarters in the red but is improving its fundamentals. This penny stock is trading at the low-end of its 52-week range and could be near a big turnaround.

Penny Stock to Buy – Grubb & Ellis (GBE)

Sub-Sector: Real Estate Management

Market Cap: $88 million

52-week range: $0.55 – $2.35

Portfolio Grader Stock Grade: B – Buy

Grubb & Ellis Co. (GBE) is a commercial real estate services and investment management company. As with the other penny stocks, GBE has seen its quarterly losses narrow recently – in fact, it cut its EPS loss in half from -88 cents two quarters ago -41 cents in its most recent quarterly report. This stock has been improving in anticipation of a recovery and was up 40% year-to-date before the May swoon took most of those gains back.

Penny Stock to Buy – GSC Investment (GNV)

Sub-Sector: Capital Markets

Market Cap: $29 million

52-week range: $1.35 – $3.80

Portfolio Grader Stock Grade: B – Buy

GSC Investment Corp. (GNV) is a public investment firm specializing in buyouts, acquisitions and recapitalization plans. After a rough two years across many sectors of the economy, there are some great buyout opportunities out there that have been made very affordable. GNV is pouncing on those, and could be on the cusp of some breakout growth.

Penny Stock to Buy – Consumer Portfolio Services (CPSS)

Sub-Sector: Consumer Finance

Market Cap: $26 million

52-week range: $0.46-$2.27

Portfolio Grader Stock Grade: B – Buy

Consumer Portfolio Services Inc. (CPSS) is a specialty finance company that engages in purchasing and serving retail automobile contracts originated by franchised automobile dealers. As auto sales have picked up, so has the business done by CPSS. This penny stock is turning around fast and is up 29% year-to-date.

These penny stocks all have great potential this week according to my latest stock analysis. But remember that these aggressive picks can change in a hurry, so make sure you have the most current research before making any trades. Also remember that penny stocks by nature are volatile and can gap up dramatically on low volume. Always use a limit order when buying these thinly-traded stocks.

As of this writing, Louis Navellier did not own any of the stocks mentioned here in personal or client portfolios.